Germany’s financial regulator forces closure of UK crypto firm

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A UK-based cryptocurrency firm has received the ax in Germany. Finatex Ltd. has been order to close parts of its activities by Germany’s Federal Financial Supervisory Authority (BaFin), according to an announcement on the BaFin website from last Friday.

Finatex operates a crypto trading platform, www.crypto-capitals.com, which provides contracts for difference (CFD) and options on indices, shares, commodities and currencies. BaFin asserts that the company is “facilitating customers’ access to the options and contracts offered” and is not authorized to do so in Germany. As such, it will have to cease those operations.

According to the Crypto-Capitals website, “Crypto-Capitals, is a premium cryptocurrency trading platform operator, with the sole objective of delivering a powerful and intriguing trading experience. Using many years of profound business vision and professional dedication have allowed us to conceive our advanced and dependable platform for financial investors to enjoy.”

Finatex is based out of Leeds. Its core business seems tied more to search engine optimization and social media marketing than to crypto, making the crypto platform appear a little out of place for its knowledge base.

BaFin has targeted the cryptocurrency community in the past, offering public warnings against crypto and, in particular, initial coin offerings (ICO). The financial regulator has repeated the warnings several times since last year; at one point asserting, “Due to the lack of legal requirements and transparency rules, the consumer is left on their own when it comes to verifying the identity, reputability and credit standing of the token provider and understanding and assessing the investment on offer. It can also not be guaranteed that personal data will be protected in accordance with German standards.”

This past February, the regulator introduced certain requirements for ICOs, stating that ICO operators are obligated “to check exactly whether a regulated instrument, [such as] a financial instrument… or a security, is being dealt with, in order to fulfil potential legal requirements without any gaps.”

BaFin is part of a larger global effort being led by financial regulators around the world that is working to introduce wide-sweeping policies for the cryptocurrency ecosystem. It is part of the G20, which has previously said that it would introduce new regulations by this month, before later admitting that it needed more time to develop the policies.